Previous studies have indicated that the Escherichia coli adenylate cyclase (AC) activity is controlled by an interaction with the phosphoenolpyruvate (PEP): sugar phosphotransferase system (PTS). A model for the regulation of AC involving the phosphorylation state of the PTS is described. Kinectic studies support the concept that the velocity of AC is determined by the opposing contributions of PEP-dependent phosphorylation (V1) and sugar-dependent dephosphorylation (V2) of the PTS proteins according to the expression percent VAC=100/[1 + (Max V2/Max V1)]. Physiological parameters influencing the rate of the PTS are discussed in the framework of their effects on cAMP metabolism. Factors that increase cellular concentration of PEP (and stimulate V1) appear to enhance AC activity while increases in extracellular sugar concentration (which stimulate V2) or internal levels of pyruvate (which inhibit V1) inhibit the activity of this enzyme.